What Is FDIC Insurance?
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects depositors against the loss of their deposits if an FDIC-insured bank fails. Created in 1933 during the Great Depression, the FDIC has never failed to protect a single penny of insured deposits.
Key Fact: FDIC insurance covers up to $250,000 per depositor, per insured institution, for each account ownership category. This coverage is automatic when you open an account at an FDIC-insured bank.
What Does FDIC Insurance Cover?
FDIC insurance covers all deposit products offered by insured banks, including:
- Checking accounts
- Savings accounts
- Money market deposit accounts
- Certificates of Deposit (CDs) — a popular safe income option compared on Safe Income Options
- Cashier's checks and money orders issued by the bank
What FDIC Insurance Does NOT Cover
- Stocks, bonds, and mutual funds
- Cryptocurrency
- Life insurance policies
- Annuities
- Municipal securities
- Contents of safe deposit boxes
- U.S. Treasury bills, bonds, or notes (these are backed by the full faith and credit of the U.S. government directly)
The $250,000 Coverage Limit
FDIC insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category. This means you can potentially have more than $250,000 insured at a single bank if the funds are in different ownership categories.
Common Account Ownership Categories
Single accounts: $250,000 per owner
Joint accounts: $250,000 per co-owner (so $500,000 for a couple)
Retirement accounts (IRAs): $250,000 per owner
Trust accounts: $250,000 per beneficiary (up to 5)
How Safe Income Options Benefit from FDIC Insurance
Safe income options like CDs and high-yield savings accounts at FDIC-insured banks are fully protected up to the coverage limit. This makes them among the safest investment vehicles available because:
- Your principal is guaranteed — you cannot lose your invested amount
- Your earned interest is also covered under FDIC insurance
- Combined principal and interest are protected up to $250,000
- Coverage is automatic — no application or additional fees required
How to Verify FDIC Coverage
You can verify that a bank is FDIC-insured by:
- Looking for the FDIC logo at the bank or on its website
- Using the FDIC's BankFind tool at fdic.gov
- Calling the FDIC at 1-877-ASK-FDIC (1-877-275-3342)
All institutions featured on Safe Income Options are verified FDIC-insured banks or backed by the US government.
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